strategic procurement management processes on …

International Academic Journal of Human Resource and Business Administration | Volume 3, Issue 9, pp. 434-463

434 | P a g e

STRATEGIC PROCUREMENT MANAGEMENT

PROCESSES ON PERFORMANCE OF PUBLIC

INSTITUTIONS IN KENYA: A CASE OF NATIONAL

TRANSPORT AND SAFETY AUTHORITY

Veronica Mwihaki Giathi

St. Pauls University, Department of Purchasing & Supplies Management, School of Business

Administration and Management, St. Pauls University, Kenya.

Robert Abayo



John Muhoho



©2021

International Academic Journal of Human Resource and Business Administration

(IAJHRBA) | ISSN 2518-2374

Received: 12th May 2021

Published: 19th May 2021

Full Length Research

Available Online at: http://iajournals.org/articles/iajhrba_v3_i9_434_463.pdf

Citation: Giathi, V. M., Abayo, R., Muhoho, J. (2021). Strategic procurement management

processes on performance of public institutions in Kenya: a case of National Transport and

Safety Authority. International Academic Journal of Human Resource and Business

Administration, 3(9), 434-463

http://iajournals.org/articles/iajhrba_v3_i9_434_463.pdf


435 | P a g e

ABSTRACT

Organisations both in the public and

private sector domain have highly adopted

strategic management with an aim to

provide a blue print in the management of

the entire firm. Excellence in procurement

has increasingly become a vital component

in the success of operations within

companies. The main objective of this

study was to assess the influence of

strategic management of procurement

processes on the organizational

performance of public institutions in

Kenya, with a focus on National Transport

and Safety Authority. The specific

objectives of the study are; To establish

the influence of supplier management on

the performance of organisations;

determine the influence of technology

utilization on the organizational

performance, Investigate the

organizational capacity influence on

organization performance of NTSA. The

study made use of a descriptive research

design while employing stratified random

technique to come up with 92 respondents

from 923 NTSA employees making a 10%

sample. Closed ended questionnaires were

used to collect data while descriptive

statistics were exploited to show the

relationship between variables. The study

made use linear regression and correlations

to show the relationship between the

independent and dependent variables.

Among the study findings, correlation

analysis revealed that there was a

significant relationship between supplier

management and organizational

performance. There was a positive

relationship between technology utilization

and organizational performance, there was

a positive relationship between

organizational capacity and organizational

performance. The study concludes that the

existence of a pre-qualified list of suppliers

who are reliable had the greatest effect on

operational performance with a mean of

3.88. the study further concluded that

organizational capacity had a distinct

procurement function/department in place

and that it’s structure supports the

implementation of strategic procurement

contributed to organizational performance.

The study suggest that there is need for

both top managers and other senior

managers in firms such as NTSA to invest

in research and development (R&D) with

an aim of adopting the new technologies

so as to keep pace with trends in the global

arena and shifts in trajectory; further study

is required focusing on other public

institutions for generalizability and

comparative analysis. Similar studies

should also be conducted to focus on

private institutions particularly Small and

Medium sized organizations an area not

much research has focused on.

INTRODUCTION

The complex and competitive environment in which today’s firms operate coupled with

technological advancement and globalization requires business organisations to devise

strategies to enable them gain competitive advantage over competition. To achieve this there

need for the management to determine the necessary competences (Spreitzer & Porath, 2012).

Consequently, competency mapping has gained significant importance in today’s competitive

business environment (Mani, 2013). Yuvaraj and Maran (2013) postulated that competency


436 | P a g e

mapping identifies the key competencies such as innovativeness for effective performance of

a particular job. Competences are derived from specific job families within the organization

such as strategy, relationships, innovativeness, leadership, risk-taking, decision-making and

emotional intelligence (Müller & Turner, 2010). This study focuses on innovativeness as a

competence aimed at establishing how it influences the performance of a firm.

Globally organizations are continuously facing the pressure of delivering results in an

uncertain world. The modern business climate demands that companies continuously improve

processes and ways of doing this to meet organizational objectives in a timely and cost-

effective manner while maintaining the organization’s profitability and market relevance. In

this dynamic global marketplace, procurement must play a leading role in capturing the value

at stake (Spiller, Reinecke, Ungerman& Teixeira, 2014). Firms in the recent past have had to

face great competitions all over the world due to the nature of the market that has been

progressively dynamic with demand for cost reduction, lean procurement, volatility of prices

and scarcity of raw materials. Organizations respond to the challenges through price

reduction, exploration of new markets and or partnerships as well as the introduction of novel

products and services as well as reorganizing the structure of administration (Pande, 2018).

Procurement has evolved over the years with its first traces seen throughout ancient history

including the Egyptians as early as 3000 BC.

In the late 1990s, digital technology became a key driver for procurement progress and by the

turn of the millennia, the role of procurement had begun its transition into strategic sourcing.

In the developed economies procurement officials have had to view the suppliers as partners

and in the long run. Contracts have been encouraged. This was the onus of what is today

referred to as procurement within the supply chain management. It has evolved and in an

environment of dynamic technology, it has been evolving and has now shifted to strategic

sourcing, vendor management software, e-procurement among other innovations that save the

organisation’s time such that they can now focus on organisation based initiatives and other

matters that pertain to the supply chain management. (Nolan, 2019). Organizations are thus

making a shift from traditional procurement to a more strategic function. This is in response

to the changing market environment and the dynamics of global competition, price reduction

pressure, need for value addition and the fight for competitive advantage. This is further

driven by globalization which is can be viewed as the expansion as well as intensification of

social relation across space and time. It is about growing worldwide interconnectivity (Steger,

2017).

According to the research by Hacket Group (2014), total cost ownership and value

management which refers to the value beyond savings are some of the characteristics of

world class procurement organizations. Strategic procurement practices to look into include

properly staffing and aligning the procurement department, with the top leadership focusing

on strategy and are less concerned about transactional ability. The well to do companies hire

procurement professionals who have a strong communication-based relationships and relation

management and related skills as well as the ability to think in a strategic manner and have a

focus on creation of value. The managers should therefore be well endowed in technology

and are capable of having solutions to complex problems.


437 | P a g e

In the context of Kenya, In January 2016, the Public Procurement and Asset Disposal Act

(PPADA) 2015 was implemented. The Public Procurement and Assets Disposal Act 2015

gives effect to article 227 of the Constitution of Kenya on efficiency and define the roles of

regulatory bodies (PPRA, 2019). The PPADA 2015 applies to public institutions and

corporations and state organs, the county governments, as well as companies owned by

entities in the public sector as well as bodies within both the county and national

governments that have a controlling interest, among others (PPRA, 2019). Both in Public and

Private organizations, the key goal of organizational strategies is to enable an organization

gain and maintain competitive advantage in the industry while maximizing the return on

costs. (Hitt, Ireland, & Hoskisson, 2017).

Procurement in the Ministry of Transport follows the tenets of PPAD 2015 Act which applies

to all public institutions. While the structural guidelines of the PPDA Act 2015 are in place,

The responsibility is still on the public organizations to come up with measures that increase

their efficiencies while saving on costs Odero & Shitseswa, (2017) in their studies point out

procurement costs take up to 50%-60% of all costs incurred by public organizations. One

way organizations do this is by benchmarking their procurement function to the global best

practices all over the world. Strategically managed supply chains has been shown to have a

significant impact on several aspects of firm performance (Kim, Suresh, &Kocabasoglu-

Hillmer, 2015).

Strategic procurement

Strategic procurement is concerned with the comprehensive organization goals and

objectives. The strategic procurement practices are proactive in nature and are focused on

providing value over the long term. It is a cyclical, holistic approach that looks beyond the

traditional procurement of simple cost-saving measures but more on overall value. One major

objective of strategic procurement is to engage with suppliers who align with the strategic

business and operational goals (Sollish & Semanik, 2018). The advent of globalization has

made some organisations to improve their supply chain management and related processes

and more so integration of ICT in their endeavours is a bid to gain some competitive edge.

Strategic procurement can further be viewed as the process of aligning and consistently

creating action that establishes the long range objectives and overall strategy or course of

action by which procurement function fulfills its mission. It entails the transformation of an

organization’s mission, goals, and objectives into measurable activities to be used to plan

budget and manage the procurement function (Kocabasoglu, 2012). Strategic procurement

can be approached from three main dimensions namely: Development and management of

key suppliers, internal operation of procurement function and coordination of purchasing with

other functions within the firm, and efforts to meet or exceed customer expectations. It is

seen as one of the critical function of an organization with the potential to; save cost, improve

operational efficiency, access to trusted suppliers, and improve in quality of product or

service, sharing of best practices among others (Magnus, 2016). There are various strategic

procurement practices that affect organizational performance. However, the main approaches


438 | P a g e

discussed in this study comprise; strategy development, spend analysis, supplier relationship

management, measurement plan, and technology utilization, (CIPS Australia, 2010).

National Transport and Safety Authority

The National Transport and Security Authority (NTSA) is a public institution domiciled

within the Ministry of Transport and Infrastructure. This Public corporation was founded via

an Act of Parliament (Cap 33 of NTSA Act of 2012). The objective of this entity was to

effectively manage the road Transport sub sector and reduce the number of lives lost through

road accidents. The Mandate of the organisation includes the provision of advice and

recommendations on matters related to the safety of vehicles, improvement as well as

implementation of road safety rules as well as manage plans for road and vehicle safety in

accordance with the set laws rules and regulations. It also ensures that supply, security and

reliability of road transport is upheld.

Over a span of more than ten years, the NTSA has been dealing with matters concerning the

safety Kenyan roads as an established authority in accordance with the Road safety Action

plan of 2011 to 2010 of the UN Decade that calls for countries to improve on the safety of the

roads in not just managing but also creating an association as well as assigning the agencies

with the requisite capacity to offer much better road safety measures. In the process of

carrying out this mandate, the authority has the mandate to register as well as license all

motor vehicles in Kenya. They also carryout motor vehicle inspection as well as certification

and the complete regulation as well as monitoring of vehicles in the public service. They also

advice to the Government on the right policies to be implemented within the transport sector.

NTSA is also responsible for drafting and enforcement of strategies for safety in our roads.

They also conduct research and compile reports on the occurrence of accidents. They also

establish the preferred systems that can be used to oversee training, test and licenses for all

Kenyan drivers. Moreover, NTSA helps in formulating the best curriculum for all driving

schools in Kenya and also coordinates with organisations and individuals as well as

organisations that deal with the Cabinet Secretary or any other laws (Bennet 2012)

Organizational Performance

Organizational performance is the ability of an organization to fulfill its mission through

sound management, strong governance and a persistent rededication to achieving results,

(Parasuraman2014).The author, further contends that enterprises that have adopted strategic

procurement are able to deliver their products and (for this study), services. When defining

Organizational performance, it is important to consider a wide variety of potential

organizational performance indicators. This research considers organizational performance in

terms of quality, productivity and service delivery, reduction of waste, cost reduction and

public (customer) satisfaction.

Statement of the Problem

The practice of strategic management has been to a great extent adopted by various

organisations, where the main aim is to provide directions as to how the management process

will carry on. It has been a tool used by various organisations to improve on their efficiency.


439 | P a g e

In the process of procurement, strategic management is utilized such that the procurement

function and activities such as invention, transport and logistics, reduction of wastage, over

production prevention, reduction of delays in procurement and processing. Excellence in

procurement is increasingly becoming a vital factor in the delivery of efficient of operations

that are highly successful within various organisations. During the downturn processes when

it is mandatory that companies consider any available means to cut on costs so as to survive,

the procurement function is vital in achievement of set strategic goals (Schiele and McCue,

2016)

There are various challenges that affect Public Institutions that are mainly within the

procurement services and that have a great impact on the overall performance of the

organisation. These include difficulties in making purchases and supplies in a timely way,

the increasing cost of transactions as well as competition from competitors. According to

Kabuga (2012) Lean procurement methodologies that are utilized by large scale

manufacturing firms in Kenya found that the methods adopted include lean procurement

practices and in a positive and significant way aided such firms in creation of a competitive

edge.

Various studies have been done on the effect of strategic procurement on the organisational

performance, the literature so reviewed has exposed a contextual, conceptual as well as

methodological gap. , Crop and Ivaro (2016) for instance investigated the relationship

between Procurement function and performance of SMEs in Nairobi County, the gap here is

mainly conceptual in that the study dwelt on SMES leaving out public institutions. The same

can be said of Manyega and Okibo (2015), Manas 2014), Kimathi (2017), Ollows and Moro

(2015). The Literature so far reviewed also exposed some the methodology based gaps. The

study by Salaberrio (2016) was done through Telephone and skipe interviews complicating

the process of coding and decoding information. While the study by Nazaline na O’dour

were conducted in Singapore and Slovania respectively. Although these studies may seem

similar to this one they were done in countries in the far East and Eastern Europe. The

context in which these two studies are done is different from that of Kenya. While the latter

is a developing nation, the former can be grouped in the second tiers of development. The

same can be said of studies by Taiwo, Yawande, Agwu and Benson (2015) Ollows and Moro

(2015

To the best of the research’s knowledge, there is a limitation in the number of studies that

have been conducted relative to the process of strategic management processes as well as the

efficiency in operations of public institutions in Kenya. It is this gap that the study sought to

fill.

General Objective of the study

The general objective of the study is to assess the Influence of strategic management of

procurement processes on the organizational performance of public institutions in Kenya, a

case of National Transport and Safety Authority.


440 | P a g e

Specific Objectives of the study

i. To assess the influence of Supplier Management on the organizational performance of

NTSA

ii. To determine the influence of Technology Utilization on the organizational

performance of NTSA

To assess the influence of organizational capacity on the organizational performance of

NTSA

LITERATURE REVIEW

Theoretical framework

Agency Theory

In agency relationships, the principal or the main party delegates work to the agent (second

party). According to Ross(1973) compensation for for deficits in expertise or a focus on the

core competencies, where the agent acts on behalf and for the principal, it resembles certain

behaviours including performing for the benefit of the principal or as an employee or the

representative of the principal. As stated by Einshardt (1989) profit maximisation as well as

self interest persists. Focusing on on the agency theory is central to the determination of the

most efficient contracts that govern the principal agent relationship. The idea of a contract is

used as a description of the relations with the agency and it is designed based on specific

outcomes such as behaviours or commissions or een bahaviours such as wages and salaries

on behalf of the agent (Eisenhardt, 1989).

The two stream Agency theory have been found in the principal-agent as well as research the

positivist view of the agency theory. (Eisenhardt, 1989). In the relationships with the agency

typically the principal in most cases reduces the cost of agency, rewarding, specifying as well

as policing the behavior of the agent while the agent works in a bid to maximize rewards and

reduce the principal control (Fleisher, 1991). Managing the agency problems effectively such

as acquiring information/communication, preferences mismatch as well as conflict of interest,

moral hazards or efforts as well as the capability that is usually associated with the agent can

also be said to be important in any relationship between the agent and the principal. The

theory provides a highly useful framework that analyses the relationship within the supply

chain management because such chains can be said to be in tandem with the principal agents

dyads. More so on the management of the suppliers within public organizations.

Resource-Based View

The resource-based view (RBV) attempts to offer an explanation on how the specific

deployment as well as combination (also known as capabilities) of the tangible and intangible

resources can potentially help companies in the achievement of a competitive advantage

(Priem&Swink, 2012). The early work of Penrose (1959) viewed organisations as bundles of

idiosyncratic resources, the developments within the RBV have in most cases directed its

attention towards the specific nature of resources as well as their positioning that can

potentially create barriers as well as economic rents for their competitors. (Lavie 2006). The


441 | P a g e

study has also highlighted the traditional RBV and at the same time assumed ownership as

well as control of resources as the main domain of the organisation. This is however in

contrast with the premise of purchasing, outsourcing or management of the entire supply

chain wherein taking advantage of the capability of the partner to compensate for the

impairment in competency and at the same time focus on the core competencies. Therefore,

the resource that is naturally proprietary as assumed by the traditional resource-based view

can potentially hinder the application of collaborative arrangements where shared and non-

shared resources are managed seeking to build a competitive edge (Lavie 2006). However, in

its rendition, RBV views the notion of a network resource as one that uses the explanatory

power within the environment of the supply chain.

The application of the resource-based view in the supply chain management mainly focuses

on the structural analysis (Miller & Rose, 2003) as well as the identification of the various

antecedents for maintenance of competitive advantage within the supply chain management.

Halldorson et al. (2007) urges that the main supply chain management decisions are under

pinned by the resource-based view though in an implicit manner. For one to respond to

uncertainties as well as changes in the form of companies at the inter-organisational

arrangements so as to enjoy resources position and barriers that are built through

collaborative efforts. This is in particular very true in certain situations where the resources

are scarce or the competition so intense to make organisations realize that reliance on the

internal resources only is not sufficient to secure competitive advantage (JAP, 2001) The

Resource based view is also critical to this study relative to the utilization of technology in

the era of globalization. Organizations in both in the public as well as the private sector are

always striving to have a competitive edge. This theory will therefore be instrumental in this

study.

Empirical Review

Effect of Supplier Management on Operational Performance

Supplier management is a holistic approach that entails supplier qualification, verification,

selection and supplier performance management which also encompasses compliance

management and supplier development which entails supplier collaboration. Smith (2014).

Abdollahi, Arvan, &Razmi, (2015) further highlight that supplier management is regarded as

the cornerstone of successful purchasing and supply management to maintain and enhance

the competitive edge in organizations. This section discusses the dimensions of supplier

management in terms of supplier selection, supplier development data management and

supplier performance management.

Suppliers are key stakeholders in any organization and play a key role in organizations

attaining or not meeting their set objectives and goals. Supplier evaluation and selection is a

process of finding the appropriate suppliers who can provide the best and quality products

and/ or services at the right time and at the right amount with an acceptable price. Supplier

selection problem is vital for a company operating in a competitive environment. To be

competitive, the company should be a continuous effort to ensure the right suppliers are

engaged (Dikmen, 2015). Selecting suppliers in a strategic manner as well as evaluating the


442 | P a g e

decision cannot be said to be solely based on the traditional selection criteria including cost,

delivery and quality. Strategic sourcing may have other additional and may be considered

with an aim to develop a supplier relationship on the long term, management practices,

financial muscle, innovativeness and technology. (Navasiri, Kumar, Garza Reyes, Lim, &

Kumari, 2016).

Krop&Iravo (2016) based on their study concluded that supplier selection has significant

effect on procurement function performance and thus an organizations overall performance.

This being brought about by the fact that quality of products and services provided are

directly linked to the suppliers selected by the organization and can in that way impact the

final product or services being provided to the end customer. In their evaluation of the effects

of supplier selection on procurement performance of public institutions,

Manyega&Okibo(2015) reported s that successfully selecting a supplier as a source of

creation of competitive advantage in that they affect performance of public organisations in a

positive way when carefully selected. A Structural approach that is well managed elevate

successful supplier selection ensures that suppliers have the experiences skills and knowledge

to perform their duties to the greatest potential possible. The institution was to benefit from

this through cost saving; financial costs, mitigating delay costs and reputational costs,

improved quality, effectiveness and efficiency. (Abdollahi, et al., 2015).

Spiller, Reinecke, Ungerman, & Teixeira (2014) highlighted that literature generally supports

that the supplier development plays a vital role in improving performance in purchasing and

contributes strategically to overall organizational performance and effectiveness. Luzzini,

Amann, Caniato, Essig, & Ronchi (2015) in their study support the definition of supplier

development and collaboration as good practice and established to have positive impact on

innovation performance of organizations. According to Deloitte’s Global CPO Survey 2014,

the heightened levels of collaboration among suppliers and the process of restructuring the

existing relationships among the top levels of procurement. They established benefits

resulting from the successful supplier collaboration and relationship building activities as

reduction of costs, drive and monitoring of performance of the strategic suppliers in a manner

that is transparent, while maintaining the focus on the main measures that support the

objectives of the business, supply risk management as well as having to comply with

sourcing that is responsible, ethical and have the required regulatory regulations through

strengthening global transparency as visibility of the relationships and the fostering of

business development and innovation through identifying as well as implementing

opportunities that can create long-term value for the organisation (Delloitte, 2015).

Olendo&Kavale (2016) established from their study that value creation has led to increase of

organizational performance as there was understanding and closeness between customers,

longrange relationship and contract to encourage suppliers to improve quality of their

products and that inventory related cost has been reduced through lead time. The

management of the supplier relationship is also tied to performance through the competitive

advantage it can create (O'Brien, 2014). Supplier engagement and development eventually

builds trust between suppliers and the organization and both collectively work towards the

achievements of the organizational goals. In this way organizations are thus intentionally


443 | P a g e

continuously working towards better standards from the suppliers impacting delivery and

performance of the organization at the same time reducing the risk of non-performance and

delivery of the suppliers (Sollish&Semanik, 2018).

Effect of Technology Utilization on Operational Performance

Technology utilization refers to the incorporation of technology in an organization’s

operations and activities. It is the application of technological resources to achieve

organizational goals (Johnson, Whittington, Scholes, Angwin, &Regner, 2017). This section

discusses the dimensions of technology utilization in terms of E-procurement, Data

Management and Risk Management. The emergence of e-procurement is not only expected to

reduce the cost of the purchasing process but also to alter the activities of purchasing,

transforming the purchasing process from an operational into a strategic activity (Gupta

&Narian, 2014).

Organizations operate in increasingly complex and uncertain environments with high risks of

supply disruptions making supply management an increasingly complex task. In the longer-

term supply disruptions can negatively affect the shareholder price and a company's long-

term financial performance. A supply disruption can also mean inability to meet demand and

satisfy customers (CIPS, 2017). Innovation through technology has created procurement

systems which contribute in mitigating these risks by providing accurate information quickly

and periodically and providing advanced tools for data analysis simplifying the process of

obtaining information facilitating prompt decision making (Lysons& Farrington, 2016).

Technology plays a key role in restructuring the way global players manage risk. It assists in

enhanced data capturing, secured data management, better retrieval time and also in

providing advanced tools for data analysis. As organizations embrace technological solutions

for the procurement function and the organizations as a whole there is need to be mindful of

the compatibility and integration of those systems to those already existing in the

organization to reap the full benefits without creating complexities in the operations

(Monczka, Handfield, Giunipero, & Patterson, 2016). 46% of procurement leaders cite lack

of data integration as the main barrier to an integrated risk management view in

organizations(Deloitte, 2015). According to Infosys (2017), technology has emerged as a

potent solution which could solve the lack of integration as global business today is moving

towards collective risk management, bringing all stakeholders to a single point. This is

providing organizations an opportunity to better calibrate their risk mitigation instruments

allowing them to be proactive and stay ahead. Overall, technology now plays a massive role

in integrating a firm’s systems across the various departments and teams which triggers

forward-thinking, leading to informed decision-making (Monczka, Handfield, Giunipero, &

Patterson, 2016).

Integrated information sharing forms the base of the hierarchy of the benefits of incorporating

technology in procurement operations (Toktas,Balav,Teoman, &Altunbey, 2014). Teams that

put a greater emphasis on qualitative and quantitative supplier data analysis was able to

quickly and successfully identify weak spots, risks and opportunities in the global supply

chain - improving the strategies and plans needed to manage the suppliers, and ultimately


444 | P a g e

both businesses, for continued success (O'Brien, 2014). These measures enable the

employees focus on attaining the organization’s core objectives which is strategic in itself as

productivity of the employees increases affecting the overall organization performance whilst

reducing the risks the organization is exposed to (Johnson, Whittington, Scholes, Angwin,

&Regner, 2017).

Effect of Organizational Capacity on Operational Performance

Organizational capacity refers to an organization’s potential to perform, its ability to

successfully apply its skills and resources to accomplish its goals and satisfy its stakeholders

expectations (UNDP, 2018). It is the ability of an organization to fulfill its mission through a

blend of sound management, strong governance, and a persistent rededication to assessing

and achieving results (Manas, 2014). This section discusses the dimensions of organizational

capacity in terms of employee skills, organizational policies and management support.

As the role of procurement has evolved from its humble, clerical, origins, to its present

strategic focus , the long run the decision for a company to invest in the right procurement

team made up of members with the right qualifications and skills will result to reduction of

costs as the right decisions are made on the onset ensuring minimal rework on supplier

selection or contract thus saving costs for the organization (Ketchen, Crook, & Christopher,

2014). Suvittawatt (2017) points out that procurement represents major part of organization

costs, then procurement employees are very important for organizations for their crucial role

in financial responsibilities since the procurement tasks directly involve profits and losses of

the organizations. Strategic procurement practices not only impact the performance of the

procurement department but the overall performance of an organization (Ketchen, Crook, &

Craighead, 2014).As the procurement function becomes more sophisticated it evolves from

playing a defensive role for instance supporting cost control to actively contributing to value

creation and with that places a demand on organizations ensuring they have the right team

with the necessary skills to reap these benefits.

The procurement professionals have to improve their procurement knowledge and skills as

the business environment has changed and the competition for limited resources is increasing

(Spiller, Reinecke, Ungerman, & Teixeira, 2014). An organizations top leadership focuses

more on strategy and not the operational abilities. There is a need for sourcing professionals

who combine deep technical insights with broad leadership skills, particularly an ability to

manage cross- functional teams and skill in managing outsourced relationships (Pande,

2018). To be effective, the procurement professional must continually explore new methods

and seek out alternatives that will improve existing processes. In turn, these improvements

will spawn new strategies. Tactics and strategies thus feed one another in a cycle of

continuous improvement (Sollish&Semanik, 2018). Another way to maximize economies of

skill is to ensure that best practices, once established, are shared widely across the

organization. Research revealed that procurement leaders have effective knowledge-

management processes in place to capture, codify, and communicate the best practices.

Action that maintain clearly defined procurement practices, processes, and methods and


445 | P a g e

facilitates extensive sharing and application in all global businesses (Spiller, Reinecke,

Ungerman, & Teixeira, 2014).

Procurement professionals undertaking strategic procurement practices will have a cross

functional integration approach in their performance (Pande, 2018). The procurement role

calls for them to interact with all other departments and teams in the organization. By virtue

of them having this cross functional approach they can act as champions and gate keepers to

ensure every team in the organization are always aligned to the organizational goals.

Procurement professionals must acquire competencies and capabilities that foster integration

with other key business functions, which would call for more research on how to develop

these competencies through talent management (Foerstl, Hartmann, Wynstra,Moser, 2014).

Organizations sometimes find themselves in the peculiar position of having more cost saving

opportunities than there are staff members to implement them. This can be a hindrance to

organizations that want to implement strategic sourcing but lacks the manpower as well as the

resources to obtain them (Sollish & Semanik, 2016).

Influence of Strategic Management on organisational performance

According to Lindsay, (2016) there are in existence a relationship between operational

efficiency and strategic management in various firms. Lindsay argues that all the strategic

management decisions are aimed at the reduction of the use of resources through

maximization of returns. Each and every action that is taken aimed at reducing inventory

based wastes for instance would be a strategic management decision that would be based on

efficiency and would make the executives share an assistant, rather that hire executives

assistants for each and every other executive.

According to Odero (2014), there exists a relationship between strategic management and

operational efficiency of firms. Lindsay argues that all the strategic management decisions

are aimed at transforming the operations of organizations and this consequently improves the

operational efficiency of the organization. Strategic management decisions that promote

efficiency tend to be aimed at reducing the use of resources through maximizing return. Any

action taken to reduce inventory waste, for example, would be a strategic management

decision aimed at greater efficiency. Efforts to increase productivity would be included in this

category. Another strategic management decision that would be efficiency-oriented would be

having executives share an executive assistant, rather than hiring executive assistants for each

executive.

Strategic management has evolved into a more sophisticated and potentially more powerful

tool of enhancing organizational efficiency (Stoney, 2011). The strategic management

process requires competent individuals to ensure its success. The top management of an

organization has responsibility to ensure firm success and overcome any competition that

occurs. However, to be more effective, Stahl and Grigsby, (2012), noted that people at all

levels, not just top management, need to be involved in strategic management; scanning the

environment for critical information, suggesting changes to strategies and programs to take

advantage of environmental shifts, and working with others to continuously improve work

methods, procedures and evaluation techniques.


446 | P a g e

The application of strategic management in business for various sectors has long been

adopted as a response to market demand, variations in clients’ taste and changing of

technology all aimed at enhancing operational efficiency. The adoption of a clear strategic

perspective in organizations is one of the factors that determine the operational efficiency of

these organizations. Having a good strategy is also one of the important factors that enable

the organizations to survive and go further. Stoner and Wankel, (2017), stated that effective

management must have a strategy and must operate on the day-to-day level to achieve it. As

noted by Pearce and Robinson, (2000), strategic management is vitally important even on the

small scale within a business in overseeing efficiency. However, strategic management is

difficult to accomplish without a clearly defined set of goals for the business' operation.

Knowing what businesses core competencies are is good from the standpoint of

understanding its strengths in the marketplace, but this also helps you to identify areas for

improvement and set goals and objectives based on those weaknesses.

Conceptual Framework

The conceptual framework in this study shows the relationship between the independent and

dependent variables. Particularly how supplier management, Technology and organisational

capacity as well as utilization of strategic management influences the procurement function

hence the performance of organisations.

Independent Variables Dependent Variable

Figure 2.1: Conceptual Framework

Source: Author (2020)

RESEARCH METHODOLOGY

For the purpose of this study, descriptive research design was used. This research design

leverages the advantages of both descriptive research approaches and correlation research

designs in order to explain the natural occurrence of phenomenon as well as explain the

relationships between the variables of a study (Schindler, 2018). The target population of the

Supplier Management

• Supplier Selection

• Supplier Development

• Supplier performance

management

Technology

• E-procurement

• Data management

• Risk Management

Performance of Public

Institutions

• Operational efficiency.

• Customer satisfaction

• Improved quality off

products and services.

• Lower Maintenance cost

Organizational Capacity

• Employee skills

• Organizational Policy

• Management support


447 | P a g e

study was the staff working at the National Transport and Safety Authority (NTSA).

According to Deloitte (2019) the organization has 923 employees working within Nairobi

County. The target population of this study was all the 923 members of staff comprising

managers, financial officers, procurement officers, logistics officers and operational officers

in NTSA headquarters in Nairobi. In this study, the researcher used the stratified random

sampling method to select 10% of the target population from NTSA as depicted in the table

below. This is based on Mugenda and Mugenda (2003) who recommends a sample size of

between 10% and 15% based on the size of the population. The study used a sample of 92

respondents.

This study used structured questionnaires for the collection of primary data. The researcher

used a drop and pick method. The questionnaires included close-ended and contingency

questions that made use of a 5-point Likert scales as the measurement scale. Quantitative

techniques was used to analyze the data collected from the respondents. The Statistical

Package for Social Scientists (SPSS version 25) was used in the analysis of the quantitative

data and the results were presented using tables. Frequencies, percentages and standard

deviation were used to describe the data descriptive statistics. Correlation and regression

analysis was used by the researcher for correlation analysis and to determine the relationship

between the research variables. The overall model can be represented as follows:

Y = β0 + β1X1 + β2X2 + β3X3 +β4X4+ ε.

Where

Y=Performance of the Organization.

X1 = Supplier Management

X2 = Technology Utilization

X3 =Organization Capacity

β0, β1, β2 β3 and, β4 Beta coefficients.

Analyzed data was then presented in form of charts, tables and graphs. The marginal changes

were interpreted.

DATA ANALYSIS AND PRESENTATION OF RESEARCH FINDINGS

The study distributed 92 copies of the questionnaire to NTSA operating within Nairobi City

County, 61 copies were accurately filled. The response rate in this study was 66% which can

be said to be significant to give reliable data for the study. The respondents were mostly

female whose composition was 65% and the rest were male. A majority of the respondents at

62.5% possess Bachelor Degrees while 32.5% possess Masters Degrees, leaving the minority

5% who hold post-secondary school diplomas. Respondents in the procurement section made

up 25% of the respondents, while those in the Finance and accounts were at 27.5%. The

human resource departments made up 17.5% of the respondents while those in enforcement

made up 20% while those in operations were at 10% within the NTSA.


448 | P a g e

Ratings of Supplier Management

The findings indicated that most of the respondents who participated in this study agreed that

their organization had a list of pre-qualified suppliers who are reliable. This variable for the

supplier management that stood out across all the surveyed employees of NTSA with the

closest mean to 5 points out of maximum five points (M=3.88, SD=1.20). The results in this

scale imply that, the respondents agreed to a great extent that NTSA is utilizing the strategic

procurement practices the findings of which are presented in the table 1cbelow.

Table 1: Ratings of Supplier Management

Supplier Management

SD D N A SA

Mean

Std

Dev

The organization has a list of pre- qualified

suppliers who are reliable.

4.6% 2.2% 13.0% 60.2% 20.0% 3.88

1.20

Suppliers are engaged through capacity

buildings and collaborations to improve

product design and quality of products

1.6% 7.5% 23.3% 52.2% 15.4% 3.58

1.35

The organization has a process to ensure

effective feedback, consultation and/or

dialogue with suppliers.

2.6% 7.8% 58.6% 18.2% 12.2% 3.27

1.36

Suppliers are trained on the importance of

company values and rules of conduct with

regard to social, environmental and economic

goals

1.8% 5.4% 69.4% 14.2% 9.2%

3.32

1.26

Am incorporated in the decision of a supplier

award whose output affects my departments

deliverables

3.2% 6.4% 8.4% 59.2% 22.8% 3.26

1.28

Overall mean and Standard deviation

3.46

1.29

Correlations Analysis

Correlation analysis was done to determine the strength and direction of relationship/

association between supplier management and organizational performance among the

employees of NTSA. The findings in Table 2 indicated a statistically strong association

between supplier management and organizational performance, r (61) = 0.6477, p<.01.

Table 2: Correlation between Supplier Management and Organizational Performance

Variables Organizational Supplier

Performance management

Organizational Pearson Correlation

Performance Sig. (2- tailed) 1.000

n=61

Supplier Pearson Correlation 0.6477 1.000

Management Sig. (2- tailed) (0.000)

n=61


449 | P a g e

Linear Regression Analysis

This study made use a linear regression analysis as to establish how organizational

performance is influenced by supplier management. This section presents the findings of

linear regression analysis in terms of model summary, ANOVA as well as the coefficient

table.

Model Summary

Table 3 presents the model summary for the regression analysis of supplier management and

organizational performance. The findings of the model summary indicate that supplier

management variable explained about 90.3% of the variability in the organizational

performance (R² = .903).

Table 3: Model Summary for Linear Relationship between Supplier Management and


R R Square Adjusted R Std. Error of

Model Square the Estimate

1 .955a .912 .903 .321

a.Predictor :( Constant), Supplier Management

Regression Analysis

The F statistics shown in Table 4 shows that there was a significant linear relationship

between supplier management and organizational performance (F (1, 61) = 8.262, p<.05).

Table 4: ANOVA for Linear Relationship between Supplier Management and


Sum of df Mean F Sig.

Model Squares Square

1 Regression 2.736 1 2.736 8.262 .005b

Residual 21.852 60 .331

Total 24.588 61

a. Predictor :( Constant), Supplier Management

Regression Coefficients

The regression coefficients presented in Table 5 indicates that supplier management can

significantly influence organizational performance of public organizations

(β =0.196, t = 2.874, p<.05).

Table 5: Regression Coefficient for Linear Relationship between supplier management

and organizational performance

Standardized

Unstandardized coefficients

Model Coefficients t Sig.

B Std.Error Beta

1 (Constant) 2.613 .248 10.539 .000


450 | P a g e

Supplier .196 .068 .334 2.874 .005

Management

The estimated regression equation from Table 5 is specified by: Organizational Performance

= 2.613 + 0.196 * Supplier Management. The model shows that supplier management

variable positively influences the organizational performance that is a unit mean index

increase in supplier management applied increases the organizational performance by a

positive mean index value of 0.196.

The findings of this study affirm the view held by Smith (2014). Abdollahi, Arvan, &Razmi,

(2015) that supplier management is regarded as the cornerstone of successful purchasing and

supply management to maintain and enhance the competitive edge in organizations. This

section discusses the dimensions of supplier management in terms of supplier selection,

supplier development data management and supplier performance management. Suppliers are

key stakeholders in any organization and play a key role in organizations attaining or not

meeting their set objectives and goals.

Effect of Technology Utilization Organizational Performance

The study sought to determine the effect of technology utilization on organizational

performance. The study conducted descriptive and correlation and linear regression analysis.

Descriptive Analysis

This section focuses on the effect of technology utilization in procurement practices on

organizational performance. Variables with a mean close to 4.0 and above represented agreed

and strongly agreed while those with a mean close to 3.0 represented “neutral” and those with

a mean of 2.0 and below represented disagreed and strongly disagreed. At the same time,

standard deviation was used to indicate the consensus of the respondents. The results are as

presented in table 4.10.

Ratings of Technology Utilisation

The findings from Table 6 indicated that most of the respondents who participated in this

study agreed that technology utilization leads to simplification of processes. This variable for

the technology utilization that stood out across all the surveyed employees of NTSA with the

closest mean to 5 points out of maximum five points (M=3.85, SD=1.2).

Table 6: Ratings of Technology Utilization

Technology utilisation SD D N A SA Mean Std-

Dev

The organization has in place an

appropriate form of E-

procurement process to automate

the procurement process

3.4% 5.5% 19.5% 58.2% 13.4% 3.48 1.13


451 | P a g e

Technology utilization in the

procurement process increases

efficiency of the organization as

a whole

3.2% 5.3% 18.9% 61.5% 11.1% 3.34 1.12

Technology utilization leads to

simplification of processes

2.6% 8.2% 66.6% 13.8% 8.8% 3.85 1.20

E-procurement system is well

integrated

With other systems in operation

3.0% 6.8% 49.0% 28.6% 12.6% 3.66 1.06

Technology utilization in the

procurement process is vital in

data management

2.0% 6.2% 19.6% 58.4% 13.8% 3.74 1.21

Over all mean and Standard

deviation.

3.614 1.144


In this section, correlation was done to determine the strength and direction of association

between technology utilization and organizational performance among the employees of

NTSA. The findings in Table 7 indicates that there was a statistical and significant strong

relationship between technology utilization and organizational performance, (r (61) = 0.6809,

p<.01).

Table 7: Correlation between Technology Utilization and Organizational Performance

Variables Organizational Technology

Performance utilization



n=61

Pearson Correlation 0.6809 1.000

Technology Sig. (2- tailed) (0.000)

Utilization n=61


Linear regression analysis was conducted to establish the effect of technology utilization on

organizational performance in public organizations. This section presents the findings of

linear regression analysis in terms of model summary, ANOVA and the coefficient table.

Model Summary

Table 8 presents the model summary for the regression analysis of technology utilization and

organizational performance. The findings of the model summary indicate that technology

utilization variable explained about 19.1% of the variability in the organizational



452 | P a g e

Table 8: Model Summary for Linear Relationship between Technology Utilization and


R R Square Adjusted R Std.Error of the

Model Square Estimate

1 .437a .191 .179 .55213

a. Predictors: (Constant),Technology Utilization

Analysis of Variance

The statistics shown in Table 9 indicates that there was a statistical and significant linear

relationship between technology utilization and organizational performance (F (1, 61) =

15.350, p<.05).

Table 9: ANOVA for Linear Relationship between Technology Utilization and


Sum of Mean

Model Squares df Square F Sig.

1 Regression 4.679 1 4.679 15.350 .000b

Residual 19.815 60 .305

Total 24.494 61

b. Predictor :( Constant), Technology Utilization


The regression coefficients presented in Table 10 indicates that technology utilization can

statistically and significantly influence organizational performance of public organizations

(β = 0.283, t = 3.918, p<.05).

Table 10: Regression Coefficient for Linear Relationship between technology utilization

and organizational performance

Standardized



B Std.Error Beta

1 (Constant) 2.390 .240 9.958 .000

Technology .283 .072 .437 3.918 .000

Utilization


= 2.390 + 0.283 * Technology Utilization; The model shows that technology utilization

variable positively influences the organizational performance, i.e. a unit mean index increase


453 | P a g e

in technology utilization applied increases the organizational performance by a positive mean

index value of 0.283.

The findings of this study are in tandem with the views of (Johnson, Whittington, Scholes,

Angwin, & Regner, 2017) Sollish & Semanik (2018) who have pointed out that the

management has the responsibility of making decisions on what activities and projects

resources was allocated to. In recognizing the importance of an efficient purchase-to-pay

process, organizations should adopt strategies and mechanisms to get the greatest benefits

from technology by choosing the right fit system and software to begin with (Toktas, Balav,

Teoman, &Altunbey, 2014) (Munyao & Moronge (2018) as evident in this study adoption of

E-procurement system leads to a positive procurement performance thus influencing

positively the overall organization performance. The shift towards strategic sourcing, e-

procurement bid and vendor management software save the organization time so that it can

focus on organization initiatives and supplier relationships (Nolan, 2018).

Effect of Organizational Capacity on Organizational Performance

The study sought to determine the effect of organizational capacity on organizational

performance. The study conducted descriptive and correlation and linear regression analysis.

Descriptive Analysis

This section focuses on the effect of organizational capacity on organizational performance.

Data was analyzed using descriptive statistics of mean and standard deviation. Variables with

a mean close to 4.0 and above represented agreed and strongly agreed while those with a

mean close to 3.0 represented “neutral” and those with a mean of 2.0 and below represented

disagreed and strongly disagreed. The findings are in Table 11

Ratings of Organizational Capacity

The findings from Table 11 indicated that most of the respondents who participated in this

study agreed that their organization had a distinct procurement function/department in place.

Also, this variable for the organizational capacity that stood out across all the surveyed

employees of NTSA with the closest mean to 5 points out of maximum five points (M=3.22,

SD=1.41).this means that the majority of the respondents were in agreement that

organisational capacity has a great influence on organisational performance.

Table 11: Ratings of Organizational Capacity

Organizational Capacity SD D N A SA

Mean Std Dev

The organization has a distinct

procurement function/department in Place

5.2% 8.4% 8.4% 57.4% 20.6% 3.67

1.40

The procurement department

inadequately staffed

4.4% 9.7% 11.5% 59.5% 14.9%

3.23 1.44

The organization has a procurement policy

in place

3.8% 10.3% 10.9% 63.6% 11.4%

3.01

1.44


454 | P a g e

Procurement is incorporated in the strategic

planning process of the Organization

5.6% 8.8% 13.4% 58.5% 13.7% 3.23

1.42

The organization has a strategic

procurement plan in place

5.1% 8.5% 8.0% 57.9% 20.5% 2.95

1.33

Overall Mean and standard deviation

3.22 1.41


Correlation between organizational capacity and organizational performance was considered.

The findings in Table 12 show that there was a statistical and significant strong relationship

between organizational capacity and organizational performance, r (61)= 0.90, p<.01).

Table 12: Correlation between Organizational Capacity and Organizational

Performance

Variables Organizational Organizational

Performance capacity



n=61

Organizational Pearson Correlation 0.90 1.000

Capacity Sig. (2- tailed) (0.001)

n=61


Linear regression analysis was conducted to establish the effect of organizational capacity on

organizational performance in public organizations. This section presents the findings of

linear regression analysis in terms of model summary, analysis of variance (ANOVA) and the

coefficient table.

Model Summary

Table 13presents the model summary for the regression analysis of organizational capacity

and organizational performance. The findings of the model summary indicate that

organizational capacity variable explained about 34.9% of the variability in the organizational


Table 13: Model Summary for Linear Relationship between Organizational Capacity

and Organizational Performance

R R Square Adjusted R Std.Error of the

Model Square Estimate

1 .591a .349 .339 .49186

a. Predictors: (Constant), Organizational Capacity


455 | P a g e

Analysis of variance

The linear regression F statistics shown in Table 14 indicates that there was a statistical and

significant linear relationship between organizational capacity and organizational

performance (F (1, 61) = 36.462, p<.05).

Table 14 : ANOVA for Linear Relationship between Organizational Capacity and


Sum of Mean

Model Squares df Square F Sig.

1 Regression 8.821 1 8.821 36.462 .000b

Residual 16.451 60 .242

Total 25.272 61 b. Predictor :( Constant), Organizational Capacity


The regression coefficients presented in Table 15 indicates that organizational capacity Can

statistically and significantly influence organizational performance of public organizations (β

= 0.357, t = 2.874, p<.05).

Table 15: Regression Coefficient for Linear Relationship between Organizational

Capacity and Organizational Performance

Standardized



B Std.Error Beta

1 (Constant) 2.105 .207 10.188 .000

Organizational .357 .059 .591 6.038 .000

Capacity


= 2.105 + 0.357* Organizational Capacity. The model shows that organizational capacity

variable positively influences the organizational performance, i.e. a unit mean index increase

in organizational capacity applied increases the organizational performance by a positive

mean index value of 0.357.

The study findings agree with the views of (Ketchen, Crook, & Christopher, 2014).

Suvittawatt (2017) points out that procurement represents major part of organization costs,

then procurement employees are very important for organizations for their crucial role in

financial responsibilities since the procurement tasks directly involve profits and losses of the

organizations. Strategic procurement practices not only impact the performance of the

procurement department but the overall performance of an organization (Ketchen, Crook, &

Craighead, 2014).As the procurement function becomes more sophisticated it evolves from

playing a defensive role for instance supporting cost control to actively contributing to value

creation and with that places a demand on organizations ensuring they have the right team


456 | P a g e

with the necessary skills to reap these benefits. The procurement professionals have to

improve their procurement knowledge and skills as the business environment has changed

and the competition for limited resources is increasing (Spiller, Reinecke, Ungerman, &

Teixeira, 2014)

Organisational performance

The study sought to investigate how different key rewards options affect performance. A

Likert scale of 1 to 5 was used such that 1 = Strongly disagree, 2 = disagree, 3 = Neutral, 4 =

Agree and 5 = Strongly agree.

Table 16: Organisational Performance

Statement SD D N A SA Mean

(𝒙)

Std.

Dev.

Provision of services has

been more efficient in the

past one year

5.2% 8.4% 8.4% 57.4% 20.6% 3.64

1.724

Quality of our products

have improved in the past

one year

4.4% 9.7% 11.5% 59.5% 14.9% 3.75

0.826

Customer satisfaction level

is high

3.8% 10.3% 10.9% 63.6% 11.4% 3.86

0.835

Maintenance cost has been

minimized

5.6% 8.8% 13.4% 58.5% 13.7% 3.66

1.782

Composite Mean 3.72 1.291

The study findings on table 16 shows that participants agreed that provision of services has

been more efficient in the past one year with a mean score of 3.64. Followed by 3.75that in

the organization, the quality of products has been improved while at a mean of 3.86 the level

of customer satisfaction is high and at a mean of 3.72 maintenance of costs has greatly been

minimized.

Correlation Analysis

The study sought to find out the relationship between the independent variables: supplier

management, technology utilisation and organisational capacity and the dependent variable:

Performance of NTSA. Pearson correlation analysis was performed to examine the statistical

linear relationship between supplier management, technology utilisation and organisational

capacity and the performance of NTSA and below are the findings.

Table 17: Summary table for Pearson Correlation between the independent and depend

variables

Supplier

management

Technology

utilisation

Organisation-

al capacity

Utilisation of

strategic

plans

Performance of

NTSA

(1) Supplier

management

Pearson Correlation 1

Sig. (2-tailed)


457 | P a g e

N 61

(2) Technology

utilisation

Pearson Correlation .554** 1

Sig. (2-tailed) .000

N 61 61

(3) Organisational

capacity

Pearson Correlation .087 .438** 1

Sig. (2-tailed) .595 .005

N 61 61 61

(4) Utilisation of

strategic plans

Pearson Correlation -.143 -.179 -.099 1

Sig. (2-tailed) .379 .270 .545

N 61 61 61 61

(5) Performance of

NTSA

Pearson Correlation -.231 .022 -.118 -.139 1

Sig. (2-tailed) .152 .892 .470 .393

N 61 61 61 61 61

**. Correlation is significant at the 0.01 level (2-tailed).

Source: Author 2020

The results in table 17 above indicate moderate a negative correlation between supplier

management, Technology utilisation, and organisation capacity, utilisation of strategic plans

and Performance of NTSA in Kenya, with r values of 0.231, 0.118 and 0.139 respectively.

This means that an increase in supplier management, organisational capacity and strategic

management utilisation in the portfolio will positively affect the Performance of NTSA.

However, the correlation is not statistically significant since the p value is greater than 0.05.

,This model can therefore be said to be a poor predictor of how independent and dependent

variables relate as the levels of significance (P-values) are not within the prism of the

acceptable level of p<0.05. The study also found a slight positive correlation between

technology utilisation and Performance of NTSA, with an r value of 0.022. The correlation is

also not statistically significant as 0.892>0.05.

The findings of this study agrees with Odero (2014) who found that there exists a relationship

between strategic management and operational efficiency of firms. Lindsay argues that all the

strategic management decisions are aimed at transforming the operations of organizations and

this consequently improves the operational efficiency of the organization. Strategic

management decisions that promote efficiency tend to be aimed at reducing the use of

resources through maximizing return. Any action taken to reduce inventory waste, for

example, would be a strategic management decision aimed at greater efficiency. Efforts to

increase productivity would be included in this category. Another strategic management

decision that would be efficiency-oriented would be having executives share an executive

assistant, rather than hiring executive assistants for each executive.

CONCLUSIONS AND RECOMMENDATIONS

Conclusion

The first research question of this study was to determine the effect of supplier management

on organizational performance in public organizations. The correlation findings showed

positive association between supplier management and organizational performance. The


458 | P a g e

study concludes that the existence of a pre-qualified list of suppliers who are reliable had the

greatest effect on operational performance with a mean of 3.88

The second research question of this study was to determine the effect of technology

utilization on organizational performance in public organizations. A positive relationship was

found between technology utilization and organizational performance. The study concludes

that technology utilization leads to simplification of processes at a mean of 3.85. Therefore

training of the NTSA employees on the e-procurement process in place positively contribute

to organizational performance.

The third research question of the study was to determine the effect of organizational capacity

on organizational performance in public organizations. The study concluded that

organizational capacity had a distinct procurement function/department in place and that it’s

structure supports the implementation of strategic procurement contributed to organizational

performance.

Recommendations

Supplier management has been shown to be an important and critical aspect for the

sustainable success of any organization and more recent researchers have also considered it

as providing a shared vision that focuses everyone in an organization on product, production

and quality improvements that are required both by the market and the need for firms to

survive (Odera 2014). This recommendation is based on the finding that supplier

management has a positive and significant effect on organizational performance. Maintaining

good supplier buyer relationships should thus be regarded not just as procurement action but

rather as a strategy with the purpose of achieving enduring beneficial buyer–supplier

relationships for such organizations as NTSA.

In this quickly changing world, technological companies are hardly competing with each

other in order to attain a competitive advantage which makes them differentiate others and

obtain a good position or higher performance. The study suggest that there is need for both

top managers and other senior managers in firms such as NTSA to invest in research and

development (R&D) not only to pursue directly new process and product innovation, but also

to increase local as well as imported technology and accomplish the trajectory shifts. The

suggestions are based on the finding that technology utilization relates with organizational

performance positively. In this regard, public organizations have to embrace technological

advancement so as to enhance experiential learning as a strategy for continuing personnel

development.

The aim of capacity development is to improve the potential performance of the organization

as reflected in its resources and its management. NTSA in this case need to distinguish

between the capacities that it needs to carry out its day-to-day activities (operational

capacities) and the capacities needed for the organization to learn and change in response to

changing circumstances (adaptive capacities). It’s evident that an organization is strong to the


459 | P a g e

extent that it taps the capacities of its individual members, shares them with others,

assimilates them, and institutionalizes them. If NTSA and other public organizations embrace

that, then it can withstand high rates of staff turnover much more effectively than weaker

organizations that fail to internalize and institutionalize their members’ capacities.

Recommendations for Further Research

The purpose of the study was to examine the effect of strategic procurement practices on

organizational performance in public organizations. The scope of the study was limited to

NTSA. The study measured the effect of supplier management, technology utilization and

organizational capacity as dimensions of strategic procurement. As this was a case study,

further study is required focusing on other public institutions for generalizability and

comparative analysis. Similar studies should also be conducted to focus on private

institutions particularly Small and Medium sized organizations an area not much research has

focused on.

REFERENCES

Abdollahi, M., Arvan, M., &Razmi, J. (2015). An integrated approach for supplier

portfolio selection: Lean or agile? Expert Systems with Applications, 42(1), 679-

690.

Adams, S. B., Dong, Y., &Corsi, T. (2014 ). Global sourcing and quality recalls: An

empirical study of outsourcing-supplier concentration-product recalls linkages.

Journal of Operations Management Volume 32, Issue 5, 241-253 .

Audi, M .R ,(2014) Purchasing and Supply Management: With 50 Supply Chain Cases,

13th edition, McGraw-Hill/Irwin, USA.

Barua C (2010). A comparative literature analysis of definitions for green and

sustainable supply chain management. Journal of Cleaner Production, 329-341.

Bennet R. (2012). Supplier Development: Theories and Practices. Journal of Mechanical

and Civil Engineering, 3, 37-51.

Bryman, A., & Bell, E. (2015). Business Research Methods.Oxford,UK: Oxford

University Press.

Chavhan, R., Mahajan, S. K., & Sarang, J. (2015). Supplier Development: Theories and

Practices. Journal of Mechanical and Civil Engineering, 3, 37-51.

Chirchir, I. C., &Gachunga, H. (2015). Role of Procurement Pre-qualification on the

Performance of Selected Public institutions in Nairobi City Council. The Strategic

Journal of Business Change and Management, 5(2), 1623 - 1648.

CIPS. (2015). Global Standard for Procurement and Supply. CIPS.

Cooper, D. R., & Schindler, P. S. (2014). Business Research Methods. New York:

Approach, Concepts, 16th Edition. Harlow: UK: Pearson.


460 | P a g e

Crane, A., Palazzo, G., Spence, L. J., & Matten, D. (2014). Contesting the value of

“creating shared value''. California management review 56 (2) , 130-153.

Creswell, J. W., & Creswell, D. J. (2018). Research Design: Qualitative, Quantitative,

and Mixed Methods Approaches Fifth Edition. SAGE.

David, F. R., & David, F. R. (2017). Strategic Management: A Competitive Advantage

Dawson, B., Young, L., Murray, J. M., & Wilkinson, I. (2017). Drivers of supplier-

customer relationship profitability in China: Assessing International Joint

Dubey, R., & Gunasekaran, A. (2015). Shortage of sustainable supply chain talent: an

industrial training framework. Industrial and Commercial Training, 47(2), 86-94.

Eisenhardt (1989). Role of Conflict and Ambiguity in Complex Organizations.

Administrative Science Quarterly, 15,150-163.

Grant, R. M. (2016). Contemporary Strategy Analysis. Cornwall, UK: Wiley. Factor Analysis

Approach. Organization: Uganda Management institute.

Hacket Group. (2014).Procurement planning and accountability of local government

procurement systems in Developing countries: Evidence from Uganda, Journal of

Public Procurement, Vol.8, No. 3, pp. 379-406

Herbert, G.,(2015). Exploring Strategy: Text and Cases (11th Edit…. Edinburg: UK: Pearson

EduactaionLimited.https://www.vroozi.com/2017/02/06/procurement-in-history-

learning-to-face-Challenges. Retrieved from VROOZI:

Kabuga, A. (2012) Supply Chain management, Product Quality and Business performance.

International Conferences on Society and Economic Development (10, 98-102)

Kache, F., &Seuring, S. (2017). Challenges and opportunities of digital information at the

intersection of Big Data Analytics and supply chain management. International

Journal of Operations & Production Management, 37(1), 10-36.

Ketchen, D. J., Crook, R. T., & Craighead, C. W. (2014). From Supply Chains to Supply

Ecosystems: Implications for Strategic Sourcing Research and Practice. Journal of

Business Logistics, 35(3, 165-171.

Kiarie, J. (2017). The Influence of supplier relationship management practices on operational

performance of large manufacturing organizations in Kenya. Nairobi, Kenya.

Kim, M., Suresh, N., &Kocabasoglu-Hillmer, C. (2015). A contextual analysis of the

impact of strategic sourcing and E-procurement on performance. Journal of

Business& Industrial Marketing, 30(1), 1-16.

Kiplagat, J., &Kiarie, D. (2015). Effect of Supplier Management Practices on Supply Chain

Performance among State Corporations in Kenya: Case Study of the Kenya Medical

Supplies Authority. International Journal of Innovative Social Sciences&

Humanities Research, 3(2), 69-85.

https://www.vroozi.com/2017/02/06/procurement-in-history-learning-to-face-

https://www.vroozi.com/2017/02/06/procurement-in-history-learning-to-face-


461 | P a g e

Kotula, M., Ho, W., Dey, P., & Lee, C. (2015). Strategic sourcing supplier selection

misalignment with critical success factors: Findings from multiple case studies in

Germany and the United Kingdom. International Journal of Production

Economics, 166, 238-247.

KPMG. (2015). Transforming a procurement organization: A financial investment firm’s

quest to support growth through procurement excellence. TX.

Luzzini, D., Amann, M., Caniato, F., Essig , M., & Ronchi, S. (2015). The path of

innovation: purchasing and supplier involvement into new product development,.

Industrial Marketing Management, 47, 109- 120.

Lysons, K., & Farrington, B. (2016). Procurement & Supply Chain Management, 9th ed.

Manas, H . E (2014) Purchasing Organizational Relationships, NAPM, Inc., Tempe, Ariz.

Manyega, V., &Okibo, W. (2015). Effects of Supplier Selection on Procurement

Performance of Public Institutions A Case Study OfKisii County, Kenya.

International Journal of Economics, Commerce and Management United

Kingdom, 3(9), 595-610.

Mokogi, W., Mairura, C., &Ombui, K. (2015). Effects of Procurement Practices on the

Performance of Commercial State Owned Enterprises in Nairobi County.

international Journal of Scientific and Research Publications, 5(6).

Mose, J. N., Ombui, K., &Iravo, M. (2018). Role of Supplier Selection Criteria on

Procurement performance in Public Universities In Kenya; A Case of Machakos

University. The Strategic Journal of Business & Change Management, 5(2), 1294

- 1325.

Munyao, J. M., &Moronge, M. (2018). Influence of E-Procurement Practices on the

Performance of Procurement in Public Universities in Kenya. The Strategic

Journal of Business & Change Management, 5(2), 1623 - 1648.

Mutai, D. (2015). Impact of Procurement Policies and Procedures on Supply Chain

Performance of Commercial Banks in Kenya. Nairobi.

Ndung'u, J., &Ochiri, G. (2017). Effect of Procurement Policy on Customer Service

Delivery in Telecommunication sector A case of Safaricom Limited. The

Strategic Journal of Business & Change Management, 4(2), 113 - 129.

Neupane, A., Soar, J., & Vaidya, K. (2014). An Empirical Evaluation of the Potential of

Public E-Procurement to Reduce Corruption. Australasian Journal of Information

Systems, 18(2), 21-44.

Nolan Y. K (2019): the influence of purchasing and supplier involvement on Strategic

purchasing and its influence on firm’s Performance. Oxford University Press.

New York.

Normanyo, S. S., Ansah, J., & Boakye, H. M. (2016). The Role of Legal/Regulatory

Framework of the Ghana Public Procurement Policy on SME Participation

.European American Journals, 39-53.


462 | P a g e

Nyanchoka , E. M., &Namusonge, G. (2014). The Effects of Globalization on Sourcing:

A Case Study of Kenya Tea Development Agency. .International Journal

ofSocial Sciences Management and Entrepreneurship, , 1 (3), 76-91.

Ocharo, J. M., &Moronge, M. (2018). Influence of E-Procurement Practices on the

Performance of Procurement in Public Universities in Kenya. The Strategic

Journal of Business & Change Management, 5(2), 1623 - 1648.

Odero H. (2014).General Managers in Action: policies and strategies. Oxford University

Press. New York.

Odero, J., &Shitseswa, A. (2017). Effect of procurement practices on procurement

performance of public sugar manufacturing firms in Western Kenya. International

Journal of Management Research &Review .

Olendo, J., &Kavale, S. (2016). Effects of Supplier Relationship Management on Supply

Chain Performance at Bamburi Cement Mombasa, Kenya. The International

Journal of Business Management, 4(7), 436 - 452.

Pande, S. A. (2018). Public procurement and corruption in Bangladesh. Confronting the

challenges and opportunities. Journal of public administration and Policy research,

2(6), 103-111. Pearsons.

PPRA. (2019). Public Procurement and Asset Disposal Act 2015. Retrieved from Public

Procurement Regulatory Authority: http://ppra.go.ke/ppda/

Prajogo, D. I. (2016). The strategic fit between innovation strategies and

business environment in delivering business performance. International

Journal of Production Economics, 171, 241-249.

Retrieved from World Health Organization:

Rizzo, J, R., House, R, J., Lirtzman, & S, I. (1970). Role of Conflict and Ambiguity in

Complex Organizations. Administrative Science Quarterly, 15,150-163.

Routroy, S., & Pradhan, K. S. (2013). Evaluating the critical success factors of supplier

development: a case study. Benchmarking: An International Journal, 20(3), 322-

341.

Sarkis, J., &Dhavale, D. G. (2015). Supplier selection for sustainable operations: A

triple-bottom-line approach using a Bayesian framework. International Journal

ofProduction Economics, 166, 177-191.

Saunders, M., & Lewis, P. (2019). Research Methods for Business Students.Harlow,UK:

Schindler, P. S. (2018). Business Research Methods. New York,NY: McGraw Hill.

Smith, P. (2014, March 21). Why Supplier Management should be central to your

procurement thinking. Retrieved from OFS Portal LLC: https://ofs-portal.com/wp-

content/uploads/2016/04/Supplier-Management-140326v4.pdf

Sollish, F., &Semanik, J. (2018). Strategic Global Sourcing Best Practices. New Delhi:

Steger A. (2017) "Value for money, Summit Buyers”. Journal of Purchasing and Materials

Management, pp. 18-26 Strategic Management Journal , 37(2), 314-329.

http://ppra.go.ke/ppda/

https://ofs-portal.com/wp-content/uploads/2016/04/Supplier-Management-140326v4.pdf

https://ofs-portal.com/wp-content/uploads/2016/04/Supplier-Management-140326v4.pdf


463 | P a g e

Tantalo, C., &Priem, R. L. (2016). Value creation through stakeholder synergy .

Tate, W. (2014). The Definitive Guide to Supply Management and Procurement. New

Jersey: Pearsons.

Toktas, P., Balav, E., Teoman, S., &Altunbey, M. (2014). The impact of barriers and

benefits of e-procurement on its adoption decision: An empirical analysis.

International Journal of Production Economics, 158, 77-90.

UK: Pearson.Education.

UNDP. (2018). The Basics of Capacity, Organizational Capacity Development, and

Evaluation. Ventures versus State Owned Enterprises. Industrial Marketing

Management, 66, 29-41.

Wang, H. (2014). Theories for competitive advantage. In H. Hasan (Eds.), Being Practical

with Theory: .A Window into Business Research, (3), 33-43.

Wangari J. (2013). Strategic management and competitive Advantage. Concept and

cases University of Nairobi

Whitmore, G. (2017). “Public Purchasing: Who’s Minding the Store?” Journal of

Public procurement (1):71-95

WHO. (2019). Global strategy on occupational health for all: The way to health at work.

Wiley India.Your Supply Base. London, UK:: Kogan Page.

Zhou, L., L, A., &Ngai, E. (2015). Supply chain management in the era of the internet of

things. International Journal of Production Economics, 159, 1-3.

strategic procurement management processes on …

Documents